Correlation Between QBE Insurance and ASSA ABLOY
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and ASSA ABLOY at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining QBE Insurance and ASSA ABLOY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QBE Insurance Group and ASSA ABLOY AB, you can compare the effects of market volatilities on QBE Insurance and ASSA ABLOY and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in QBE Insurance with a short position of ASSA ABLOY. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and ASSA ABLOY.
Diversification Opportunities for QBE Insurance and ASSA ABLOY
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between QBE and ASSA is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and ASSA ABLOY AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSA ABLOY AB and QBE Insurance is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on QBE Insurance Group are associated (or correlated) with ASSA ABLOY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSA ABLOY AB has no effect on the direction of QBE Insurance i.e., QBE Insurance and ASSA ABLOY go up and down completely randomly.
Pair Corralation between QBE Insurance and ASSA ABLOY
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.8 times more return on investment than ASSA ABLOY. However, QBE Insurance Group is 1.26 times less risky than ASSA ABLOY. It trades about 0.19 of its potential returns per unit of risk. ASSA ABLOY AB is currently generating about 0.08 per unit of risk. If you would invest 1,160 in QBE Insurance Group on November 1, 2024 and sell it today you would earn a total of 50.00 from holding QBE Insurance Group or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. ASSA ABLOY AB
Performance |
| Timeline |
| QBE Insurance Group |
| ASSA ABLOY AB |
QBE Insurance and ASSA ABLOY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and ASSA ABLOY
The main advantage of trading using opposite QBE Insurance and ASSA ABLOY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, ASSA ABLOY can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ASSA ABLOY will offset losses from the drop in ASSA ABLOY's long position.| QBE Insurance vs. PLAYSTUDIOS A DL 0001 | QBE Insurance vs. TOREX SEMICONDUCTOR LTD | QBE Insurance vs. RYU Apparel | QBE Insurance vs. Semiconductor Manufacturing International |
| ASSA ABLOY vs. Singapore Reinsurance | ASSA ABLOY vs. ZURICH INSURANCE GROUP | ASSA ABLOY vs. QBE Insurance Group | ASSA ABLOY vs. UNIQA INSURANCE GR |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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